US refiners target crude-by-rail as spread widens

The discount widened as the Syncrude upgrader returned from maintenance last month. It produced 308,300 bbl of synthetic light, sweet crude a day in October, the most since April, according to the website of Canadian Oil Sands Ltd., the plant’s operating partner. Phillips 66 is now moving more crude by rail.

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By DAN MURTAUGH and ELIOT CAROOMBloomberg

Bakken crude in North Dakota slipped to an eight-month low
against European imports, prompting a US
East Coast refiner to increase crude-by-rail shipments.

The discount, which compares field prices in North Dakota to
the European benchmark that many
waterborne crudes are priced against, narrowed to $10.52/bbl on
July 19 as the Syncrude upgrader in Alberta reduced production
during maintenance after a fire.

The discount widened as the Syncrude upgrader returned from maintenance last month. It produced
308,300 bbl of synthetic light, sweet crude a day in October,
the most since April, according to the website of Canadian Oil
Sands Ltd., the plants operating partner.

Phillips 66 is moving more crude by rail, company executives
said on an Oct. 30 conference call.

Today, rail movements for us showed, in total, are
probably a little less and 100,000 barrels a day or so, but
clearly were ramping up our capacity, CEO Greg
Garland said.

The company cut crude-by-rail shipments to its Bayway refinery in New Jersey to 30,000 bpd
in August or September from 100,000 in the second quarter as
the spread narrowed, Tim Taylor, the companys executive
vice president of commercial, transportation, business
development and marketing, said on the same call.

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